By Katherine Yung
Detroit Free Press
DETROITÂ â€” In a small second-story office onÂ Main StreetÂ inÂ Ann Arbor, Mich.,Â Liberty ClinicÂ is doing brisk business, selling medical marijuana forÂ $360 to $400Â an ounce. In just 3 1/2 months, 750 patients have come through its doors.
InÂ Lansing, Mich.,Â Danny TrevinoÂ has expanded beyond his HydroWorld hydroponics store, adding two medical clinics, grow classes and a dispensary.
And inÂ Ypsilanti, Mich.,Â Darrell StavrosÂ and his partners have set up a medical marijuana service center, renting space to a support group, doctors and a bong shop. “This is creating an enormous amount of businesses that never existed,” he said.
Medical marijuana, one ofÂ Michigan’sÂ newest industries, is taking off. Dozens of hydroponics stores, medical clinics and grow schools are popping up. And at support groups, cafes and dispensaries, patients and growers are buying and selling the drug.
As with any industry, there are challenges, such as crop failures and theft. And limits on the size of growers’ crops make it all but impossible for growers to get rich, though they can earn some decent money.
“A few people will make a few bucks. Most people won’t make much,” saidÂ Adam Brook, organizer of the annual Ann Arbor Hash Bash.
InÂ Michigan’sÂ burgeoning medical marijuana industry, few rules exist, much of the business occurs in secrecy and the only way for growers to make big bucks is to break the law.
“If you operate within the law, you’re not going to make a lot of money,” saidÂ Leili Russo, who grows marijuana for medical purposes and serves as the secretary of theÂ Genesee County Compassion ClubÂ inÂ Flint, Mich.
Growers, also called caregivers, say that at best, they can makeÂ $40,000Â a year. And that’s after spendingÂ $1,000Â or more on equipment and other supplies, and putting in countless hours every day tending to plants.
UnderÂ Michigan’sÂ medical marijuana law, caregivers can supply only five patients. Each patient can have 12 plants. But growers who choose to ignore these rules can easily makeÂ $100,000, said Brook, an industry consultant, an annual rally to support reforming marijuana laws.
With these conditions, it’s no surprise that medical marijuana is becoming a big business inÂ Michigan’sÂ depressed economy. Nineteen months after residents voted to legalize medical marijuana, the industry has attracted more than 8,000 caregivers, people who grow and harvest marijuana plants so they can be turned into medicine for patients, according to theÂ Michigan Department of Community Health.
For caregivers who abide by the law, this kind of work is usually a second job. That’s the case withÂ Corey Hathaway, 33, ofÂ Eaton Rapids, Mich.Â Hathaway used to run his own commercial construction company, but that business dried up when the economy tanked. So he found a job working at HydroWorld, a hydroponic shop inÂ Lansing. To supplement his income, he also is a caregiver with five patients.
“The people that are greedy don’t succeed because they can’t maintain the patient-caregiver relationship,” he said.
The law is vague about what caregivers can do if they produce more marijuana than their patients need. To make extra money, some sell their overages on the black market or to dispensaries, clinics or other caregivers.
Growing marijuana is just one part of the rapidly expanding industry. Experts say more lucrative opportunities can be found selling the hydroponic equipment that caregivers need and teaching them how to grow marijuana properly. Another moneymaker: operating clinics that help people get the paperwork they need to qualify as medical marijuana patients.
These kinds of service businesses are springing up all around the state and are the most visible part of the industry. Already, price wars have sprung up among the dozens of hydroponic shops that have opened in southeastÂ Michigan.
The intense competition hasn’t stoppedÂ Kriss Pullen-GideonsÂ from believing that her store,Â Gro BlueÂ in downtownÂ Ann Arbor, has a bright future. She used some of her retirement savings to open the small shop, and her son and daughter are co-owners.
“People are surprised at how many regular people just walk through the door,” she said. “It’s definitely going to be a growing industry. We should embrace it.”
Hydroponic stores aren’t the only ones cashing in. Attorneys, grow consultants, grow-room designers and contractors and grow schools are all finding a market for services.
“There are so many people that are excited about being able to work,” saidÂ Michael Komorn, aÂ Southfield, Mich., medical marijuana attorney and the treasurer of the 17,000-memberÂ Michigan Medical Marijuana Association. “They want to get back into the marketplace.”
Entrepreneurs also are flocking to the sales side of the business, operating an estimated 20 dispensaries, cafes and clinics in the state, according to medical marijuana attorneys. AtÂ Liberty ClinicÂ inÂ Ann Arbor, patients payÂ $12Â for an annual membership that allows them to purchase different strains of marijuana, which are displayed in small see-through packets on a counter. Liberty buys its marijuana from caregivers throughout the state.
“We hope to be a model,” said the owner, a former home inspector forÂ Bank of AmericaÂ who would only give his name as James Chainsaw.
MichiganÂ law does not specifically address these kinds of clinics and dispensaries. But industry experts expect that it will only be a matter of time before courts challenge their legality. Already, a number of cities and towns have passed ordinances prohibiting medical marijuana businesses.
To stay within the law, many patients and caregivers are buying and selling marijuana at facilities operated by a few so-called compassion clubs, which act as support groups for patients.
The Genesee County Compassion ClubÂ is the state’s largest, with more than 1,000 members. Every Tuesday, Thursday and Saturday, it holds private meetings for members at its office in a small strip mall inÂ Flint; smoking marijuana is permitted. Membership costsÂ $20Â a year and includes a T-shirt.
The Ypsilanti Compassion ClubÂ takes a different approach. Its members meet at the 3rd Coast Compassion Center inÂ Ypsilanti, which is open every day except Sunday. Marijuana smoking is allowed in some of the rooms. “We provide them a safe office environment,” saidÂ Darrell Stavros, one of the owners of 3rd Coast, which rents space to the club.
Whether these kinds of facilities will become the main avenue for medical marijuana sales inÂ MichiganÂ remains to be seen. But one thing’s for certain. With more than 1,000 medical marijuana patient applications arriving inÂ LansingÂ each week, the industry is only going to get bigger, with all kinds of business ventures likely to be launched.
“It’s definitely the wild, wild Midwest,” saidÂ Matthew Abel, one of the state’s leading medical marijuana attorneys.
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